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Cambridge Bancorp Reports First Quarter Results

Monday, April 22, 2013

CAMBRIDGE, Mass. - Cambridge Bancorp (OTC BB: CATC) today reported unaudited net income of $3,331,000 for the first quarter of 2013 compared to $3,285,000 for the same quarter in 2012. The modest earnings increase of $46,000 (1.4%) was attributable to a combination of solid growth in noninterest income offset by lower net interest income and higher noninterest expense for the quarter ended March 31, 2013. Diluted earnings per share remained unchanged at $0.85 quarter-over-quarter.

"The Bank is off to a solid start in the first quarter of 2013," noted Joseph V. Roller II, president and CEO. "It is clear the banking industry will continue to be challenged with a low interest environment and uncertain regulatory changes. Cambridge Trust continues to benefit from investments made across the Company and remains focused on executing its business plans."

Net interest income for the quarter ended March 31, 2013 was $11.0 million compared to $11.5 million in the first quarter of 2012. The decrease was driven by a continued drag of investment security yields at historically low levels and further pressure on loan pricing. The confluence of these factors resulted in a compression of the Bank's net interest margin by 41 basis points to 3.31% for the quarter compared to 3.72% for the quarter ended March 31, 2012.

Noninterest income of $5.9 million for the March 2013 quarter was up $1.1 million (22.6%) compared to the same quarter in 2012. The Bank continued to grow Wealth Management income, which increased $402,000 (12.0%) between the comparable periods, from new account growth and market appreciation. Assets under management grew to $1.9 billion at the end of the first quarter 2013 from $1.8 billion at year-end 2012. Other contributors to the noninterest income increase for the first quarter of 2013 were income produced from gains on loans sold of $298,000, a new source of revenue since the second quarter of 2012, and gains from the disposition of investment securities of $343,000 compared to the first quarter of 2012.

The Bank sustained the trend of growth in loans during the first quarter of 2013. Total loans outstanding increased by $31.5 million (4.2%) to $773.7 million since year-end 2012 and by $82.3 million (11.9%) in comparison to March 31, 2012. The loan growth in the first quarter of 2013 was primarily attributable to increases in residential mortgages of $22.2 million (6.4%) and commercial mortgages of $15.2 million (5.5%). Home equity loans were down by $4.1 million (8.0%) since year-end 2012 as consumers refinance debt due to favorable interest rates.

Non-performing loans as a percentage of total loans stood at 0.19% at March 31, 2013, down compared to 0.21% at December 31, 2012. Loan quality remains sound and the Allowance for Loan Losses stood at $11.1 million or 1.44% of total loans outstanding at March 31, 2013. At December 31, 2012, the Allowance for Loan Losses was $10.9 million or 1.47% of total loans outstanding. In response to continued loan growth, the provision for loan losses was $200,000 for the current quarter.

Noninterest expense in the first quarter of 2013 totaled $11.7 million, an increase of $406,000 (3.6%) over the first quarter of 2012. Salaries and employee benefits, occupancy and equipment, and data processing costs contributed to the increase for the comparable periods.

Total deposits decreased by $51.0 million (4.0%) since year-end 2012, yet increased by $73.5 million (6.4%) over March 31, 2012.

Total assets at first quarter 2013 end were $1.4 billion, unchanged from year-end 2012.

About Cambridge Bancorp

Cambridge Bancorp and its subsidiary, Cambridge Trust Company, are based in Cambridge, Massachusetts, in the heart of Harvard Square. Cambridge Trust Company is a 123-year-old Massachusetts chartered commercial bank with $1.4 billion in total assets and 12 Massachusetts locations in Cambridge, Boston, Belmont, Concord, Lexington, Lincoln, and Weston. Cambridge Trust Company is one of New England's leaders in wealth management with $1.9 billion in client assets under management. In addition, Cambridge Trust Company of New Hampshire offers wealth management services at two New Hampshire locations, Concord and Portsmouth. The accompanying unaudited condensed interim consolidated financial information should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Cambridge Bancorp 2012 Annual Report, which is posted in the investor relations section of our website at www.cambridgetrust.com/annualreport. We will also post supplemental financial information for first quarter of 2013 at the same site later this month. Interim results are not necessarily reflective of the results for the entire year.

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